Waterstones boss James Daunt: Kindle e-books could be bundled with hardbacks

James Daunt, the head of Waterstones, said the book shop would like to start
to offering customers discounted e-books when they buy the hardback version,
as he unveiled a tie-up with Amazon to sell Kindles in the book chain.

Waterstones will install Wi-Fi in all of its shops to allow customers to download Kindle ebooks

Waterstones, the struggling high street retailer, took the book industry by surprise today by announcing that it would start to sell Kindles, the ebook reader owned by Amazon, in its shops. The success of Amazon, and its selling of cut-price books over the internet, is widely credited with severely denting Waterstones' fortunes. Only a few months ago Mr Daunt called Amazon "a ruthless, moneymaking devil".

However, Mr Daunt, who took over last year, said: "This works for both sides. We are clearly going to be selling lots of Kindles and e-books, so that is good for Amazon. But we have a sensible commercial arrangement and one with think makes it worthwhile for us.

"We earn nothing from digital books at the moment."

He would not say how much cut Waterstone's would make on selling e-books and Kindles.

He said Waterstones would be unable to offer cheaper prices for the piece of hardware that either Argos, Amazon, or John Lewis did. However, he added that Waterstones was the only outlet that was also a bookseller and would offer tutorials to customers about how best to use their Kindles, and to offer ebook suggestions.

Asked if Waterstones could offer "Kindle Bundles", giving discounts on the ebook version of any hardback that a shopper bought, he said it was something they would like to look into. "The whole focus is what can we do to give customers what they want? We have all sorts of ideas and we are talking to publishers about them."

Another option is to allow customers to browse the full ebook when they are in store. Currently, on Amazon's website you can usually only read the first few pages before you buy. As part of the tie-up, Waterstones will roll out free Wi-Fi in all of its shops.

The move by Waterstones means it finally catches up with WH Smith, which has been selling the Kobo ereader for the last year, and which boasts of having a catalogue of 2.2m titles and one million free books, considerably more than the Kindle.

It was thought that Waterstones was working on its own ereader. Barnes & Noble, the American book retailer developed its own, the Nook, which has managed to steal some market share off Kindle." Mr Daunt said that if his predecessors had worked harder on their own version "we might be competing on a level" with internet suppliers.